71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
HA to B-Eng. SB 827
LC 3299/SB 827-B9
HOUSE AMENDMENTS TO
B-ENGROSSED SENATE BILL 827
By COMMITTEE ON RULES, REDISTRICTING, AND PUBLIC AFFAIRS
June 30
On page 1 of the printed B-engrossed bill, line 2, after the
semicolon delete the rest of the line and lines 3 and 4 and
insert ' creating new provisions; and amending ORS 650.120 and
650.130.'.
Delete lines 6 through 26 and delete pages 2 through 4 and
insert:
' { + SECTION 1. + } If Senate Bill 826 becomes law, ORS
650.120, as amended by section 1, chapter 216, Oregon Laws 2001
(Enrolled Senate Bill 826), is amended to read:
' 650.120. For the purposes of ORS 650.120 to 650.170:
' (1) 'Dealer' means any person who has been issued a vehicle
dealer certificate under ORS 822.020 and pursuant to a franchise
from a manufacturer, distributor or importer engages in buying,
selling, leasing or exchanging new motor vehicles.
' (2) 'Dealership' means the location from which a dealer buys,
sells, leases, trades, stores, takes on consignment or in any
other manner deals in new motor vehicles.
' (3) 'Distributor' means a person who sells or distributes
motor vehicles { + other than motor homes + } to motor vehicle
dealers.
' (4) 'Fleet owner' means a person in this state who at one
time buys or leases for use in a business:
' (a) 15 or more motor vehicles with a gross vehicle weight
rating of less than 8,500 pounds; or
' (b) 50 or more vehicles with a gross vehicle weight rating of
8,500 pounds or more.
' (5) 'Franchise' means a contract or agreement under which:
' (a) The franchisee is granted the right to sell, lease and
exchange new motor vehicles manufactured, distributed or imported
by the franchisor;
' (b) The franchise is an independent business operating as a
component of a distribution or marketing system prescribed in
substantial part by the franchisor;
' (c) The franchisee's business is substantially associated
with the trademark, trade name, commercial symbol or
advertisements designating the franchisor or the products
distributed by the franchisor;
' (d) The franchisee's business is substantially reliant on the
franchisor for a continued supply of motor vehicles, parts and
accessories;
' (e) The franchisee is granted the right to perform warranty
repairs authorized by the franchisor; and
' (f) The franchisee is granted the right to sell, install and
exchange parts, equipment and accessories manufactured,
distributed or imported by the franchisor for use in or on motor
vehicles.
' (6) 'Franchisee' means a dealer to whom a franchise is
granted.
' (7) 'Franchisor' means a manufacturer, distributor or
importer who grants a franchise to a dealer.
' (8) 'Importer' means a person who transports or arranges for
the transportation of any foreign manufactured new motor vehicle
into the United States for sale in this state.
' (9) 'Manufacturer' means a person who manufactures or
assembles motor vehicles or who manufactures or installs on
previously assembled truck chassis special bodies or equipment,
other than motor homes, that when installed forms an integral
part of the motor vehicle and constitutes a major manufacturing
alteration and which completed unit is owned by the manufacturer.
' (10) 'Manufacturer's suggested retail price' means the retail
price of the new motor vehicle suggested by the manufacturer,
including the retail delivered price suggested by the
manufacturer for each accessory or item of optional equipment
physically attached to the new motor vehicle at the time of
delivery to the dealer that is not included within the retail
price suggested by the manufacturer for the new motor vehicle
without the accessory or optional equipment.
' (11) 'Motor home' means a motor vehicle that is designed to
provide temporary living quarters and is built into an integral
part of, or is permanently attached to, a self-propelled motor
vehicle chassis or van. The vehicle must contain permanently
installed independent life support systems and provide at least
four of the following facilities:
' (a) Cooking;
' (b) Refrigeration or ice box;
' (c) Self-contained toilet;
' (d) Heating or air conditioning;
' (e) A potable water supply system including a faucet and
sink; or
' (f) A separate 110-120 volt electrical power supply or liquid
petroleum gas supply.
' (12) 'Qualified vendor' means a person with a contract or
agreement to sell goods or services to a manufacturer,
distributor or importer.
' (13) 'Relevant market area' means:
' (a) For a dealer primarily of motor vehicles with a gross
vehicle weight rating of less than 8,500 pounds, a circular area
around an existing dealership of:
' (A) Not less than a 10-mile radius from the dealership site;
' (B) Not less than a 15-mile radius from the dealership site
if the population is less than 250,000 within a 10-mile radius
from the existing dealership and 150,000 or more within a 15-mile
radius from the existing dealership;
' (C) Not less than a 20-mile radius from the dealership site
if the population is less than 150,000 within a 15-mile radius
from the existing dealership; or
' (D) The area of sales and service responsibility determined
under the franchise agreement if the area is larger than the
areas provided for in this paragraph.
' (b) For a dealer primarily of motor vehicles with a gross
vehicle weight rating of 8,500 pounds or more, a circular area
around an existing dealership of:
' (A) Not less than a 25-mile radius from the dealership site;
or
' (B) The area of sales and service responsibility determined
under the franchise agreement if the area is larger than the area
provided for in subparagraph (A) of this paragraph.
' (14) 'Replacement dealer' means any person who, at a
dealership where the former dealer was franchised by the same
manufacturer, distributor or importer, has been issued a vehicle
dealer certificate under ORS 822.020 and pursuant to a franchise
from a manufacturer, distributor or importer engages in buying,
selling, leasing or exchanging new motor vehicles.
' { + SECTION 2. + } If Senate Bill 826 becomes law, ORS
650.130, as amended by section 2, chapter 216, Oregon Laws 2001
(Enrolled Senate Bill 826), is amended to read:
' 650.130. Notwithstanding the terms of any franchise or other
agreement, it shall be unlawful for any manufacturer, distributor
or importer to:
' (1) Require or attempt to require a dealer to accept delivery
of any motor vehicle, part, accessory or any other commodity not
voluntarily ordered by the dealer. This subsection shall not
apply to recall safety and emissions campaign parts not
voluntarily ordered by the dealer or any vehicle features, parts,
accessories or other components mandated by federal, state or
local law.
' (2) Coerce or attempt to coerce a dealer to enter any
agreement or sales promotion program by threatening to cancel the
franchise of the dealer.
' (3) Refuse or fail to deliver, within a reasonable time and
in a reasonable quantity, any new motor vehicle, part or
accessory covered by the franchise if the vehicle, part or
accessory is advertised as being available for delivery or is
being delivered to another dealer. This subsection is not
violated, however, if a failure to deliver is the result of a
cause beyond the control of the manufacturer, distributor or
importer.
' (4) Prevent or attempt to prevent a dealer from making
reasonable changes in the capital structure of a dealership or
the means by which the dealership is financed, provided that the
dealer meets any reasonable capital requirement of the
manufacturer, distributor or importer.
' (5) Unreasonably refuse to compensate the dealer for work or
services performed and expenses incurred in accordance with the
dealer's delivery, preparation and warranty obligations under the
terms of a franchise or agreement.
' (6) Coerce or attempt to coerce a dealer to participate
monetarily in any advertising campaign or contest, or purchase
any promotional materials, display devices or display decorations
or materials at the expense of the dealer.
' (7) Establish a maximum price a dealer may charge for motor
vehicles with a gross vehicle weight rating of less than 8,500
pounds.
' (8) Initiate an audit to determine the validity of paid
claims for dealer compensation or any charge-backs for warranty
parts or service compensation more than one year following the
date of payment. Parties shall cooperate to ensure that permitted
audits are concluded within 90 days of initiation.
' (9) Initiate an audit to determine the validity of paid
claims for dealer compensation or any charge-backs for consumer
or dealer incentives more than two years following the date of
payment. Parties shall cooperate to ensure that permitted audits
are concluded within 90 days of initiation.
' (10) Unfairly compete with a dealer in any matters governed
by the franchise including, but not limited to, the sale or
allocation of vehicles or other franchisor products, or the
execution of dealer programs or benefits. This subsection applies
if the manufacturer, distributor or importer has an ownership
interest in, operates or controls, directly or indirectly, a
business that is a dealer in this state.
' (11) Have an ownership interest in, operate or control,
directly or indirectly, a business that sells or leases a motor
vehicle to a person in Oregon except to a franchisee of the
manufacturer, distributor or importer. It is not a violation of
this subsection if:
' (a) A manufacturer, distributor or importer:
' (A) Has an ownership interest in, operates or controls,
directly or indirectly, a business that is a dealership in this
state and is a business that:
' (i) A franchisee owned, operated or controlled before the
manufacturer, distributor or importer acquired the ownership
interest in or began to operate or control the business;
' (ii) The manufacturer, distributor or importer maintains an
ownership interest in, operates or controls for no more than two
years; and
' (iii) While the manufacturer, distributor or importer
maintains an ownership interest in, operates or controls the
business, the manufacturer, distributor or importer offers the
business for sale to any qualified independent person at a fair
and reasonable price.
' (B) Has a part ownership interest in, operates or controls,
directly or indirectly, a business that is a dealership in this
state and another person:
' (i) Manages the day-to-day operations and business of the
dealership;
' (ii) Has made, or is obligated to make within 12 months, a
significant capital investment in the dealership that is subject
to loss;
' (iii) Has an ownership interest in the dealership; and
' (iv) Operates the dealership under a franchise through which
the person will within 15 years acquire full ownership of the
dealership under reasonable terms and conditions.
' (C) As of January 1, 2000, had an ownership interest in,
operated or controlled, directly or indirectly, a business that
is a dealership in this state that sells motor vehicles with a
gross vehicle weight rating of 8,500 pounds or more.
' (D) Has an ownership interest in, operates or controls,
directly or indirectly, a business that { - is a dealership in
this state, the primary business of which is the leasing or
renting of - } { + primarily leases or rents + }motor vehicles
for a period of 12 months or less { + and the only motor
vehicles that the business sells are motor vehicles that have
been:
' (i) Owned by the business for 180 days or more; or
' (ii) Driven more than 10,000 miles while owned by the
business.
' (E)(i) Has an ownership interest in, operates or controls,
directly or indirectly, a business that finances the sale or
lease of motor vehicles; and
' (ii) Is a business that sells or leases motor vehicles to
retail lessees in Oregon.
' (F) Has an ownership interest in, operates or controls,
directly or indirectly, a business that makes a sale or lease of
a motor vehicle that is not a violation of subsection (12) of
this section + }.
' (b) A manufacturer has a part ownership interest in, operates
or controls, directly or indirectly, a business that is a
dealership in this state that buys, sells, leases, trades,
stores, takes on consignment or in any other manner deals
exclusively in a single line-make of the manufacturer and:
' (A) The manufacturer has, directly or indirectly, no more
than 45 percent of the ownership interest in the dealership;
' (B) When the manufacturer acquires an ownership interest in
the dealership, the distance from the manufacturer's dealership
to the dealership of a dealer that buys, sells, leases, trades,
stores, takes on consignment or in any other manner deals in the
single line-make of the manufacturer and in which the
manufacturer has no ownership interest is not less than 15 miles;
' (C) The manufacturer complies with the area restrictions in
ORS 650.120 and 650.150;
' (D) The manufacturer's franchises authorize a dealer of the
single line-make of the manufacturer to operate as many
dealerships within a defined geographic area as the dealer and
manufacturer agree on; and
' (E) On January 1, 2000:
' (i) There were no more than four dealers in the state of the
manufacturer's single line-make; and
' (ii) Of the dealers in this state of the manufacturer's
single line-make, at least one was a franchisee that owned and
operated at least two dealerships within the geographic area
authorized by franchises with the manufacturer.
' (12) Sell or lease a motor vehicle to a person in this state
other than to a business described in subsection (11) of this
section or to a franchisee of the manufacturer, distributor or
importer. It is not a violation of this subsection if:
' (a) The manufacturer, distributor or importer sells or leases
a motor vehicle to:
' (A) An employee, retired employee or family member of an
employee or retired employee of the manufacturer, distributor or
importer;
' (B) A driver training program;
' (C) A nonprofit corporation;
' (D) A qualified vendor;
' (E) A public agency as defined in ORS 537.515;
' (F) A current retail lessee;
' (G) A fleet owner;
' (H) A business acting as a vehicle dealer under ORS chapter
822 that sells motor vehicles only to other vehicle dealers; or
' (I) The customers of a business acting as a vehicle dealer
under ORS chapter 822 that sells motor vehicles only to other
vehicle dealers.
' (b) The sale or lease is by a business in this state { - ,
the primary business of which is the leasing or renting of - }
{ + that primarily leases or rents + }motor vehicles for a
period of 12 months or less { + and the only motor vehicles that
the business sells are motor vehicles that have been:
' (A) Owned by the business for 180 days or more; or
' (B) Driven more than 10,000 miles while owned by the
business.
' (c) The sale or lease is by a subsidiary of a manufacturer,
distributor or importer that finances the sale or lease of motor
vehicles and the sale or lease is to a person who previously
leased the vehicle from the subsidiary + }.
' (13)(a) Own, operate or control a business or enter into any
contract, agreement or other written instrument permitting a
person that is not a dealer to be compensated by the
manufacturer, distributor or importer for performing warranty
repairs and services if the business is located within a dealer's
relevant market area.
' (b) Paragraph (a) of this subsection does not apply to:
' (A) Warranty repairs and services performed on motor vehicles
with a gross vehicle weight rating of less than 8,500 pounds
provided for commercial or government fleets; or
' (B) Warranty repairs and services performed on motor vehicles
with a gross vehicle weight rating of 8,500 pounds or more if,
after the effective date of this 2001 Act, a manufacturer,
distributor or importer of only motor vehicles with a gross
vehicle weight rating of 8,500 pounds or more has:
' (i) Obtained written permission from the dealers in the
relevant market area to perform the repairs or services; or
' (ii) Authorized the repairs or services to be performed by a
person who owns or leases the motor vehicles for use in the
person's business.
' (14) Terminate, cancel, fail to renew or fail to approve the
sale, transfer or assignment of any franchise agreement because
the dealer owns, has an investment in, participates in the
management of or holds a franchise agreement with another
manufacturer, distributor or importer at a different dealership
site, or has franchises with more than one manufacturer,
distributor or importer sharing the same dealership site,
facilities, personnel or display space before October 23, 1999.
' { + SECTION 3. + } { + The amendments to ORS 650.120 and
650.130 by sections 1 and 2 of this 2001 Act apply to conduct
occurring on or after the effective date of this 2001 Act. + } '
.
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